EMERGING MARKETS-Latin American currencies, stocks edge up; Brazil's fiscal package eyed

By Nikhil Sharma

June 3 (Reuters) - Latin American currencies and stocks edged up on Tuesday as investors assessed the unpredictable U.S. trade policy shifts, while attention shifted to the Brazilian government's fiscal package that is set to be unveiled later in the day.

Investors were hopeful of progress on the trade front this week. The Trump administration expects countries to submit their best offers in trade negotiations as officials seek to accelerate talks with multiple partners ahead of a self-imposed deadline for a 90-day tariff pause in just five weeks.

Providing slight relief from chaos was the announcement of a potential talk between U.S. President Donald Trump and Chinese leader Xi Jinping later this week as the two sides attempt to settle their trade dispute.

Jon Harrison, managing director of EM Macro Strategy at TS Lombard, said the fears of a potential breakdown of the U.S.-China discussions following an earlier easing of tensions is affecting emerging market risk appetite.

MSCI's index for Latin American currencies .MILA00000CUS rose 0.3%, after advancing 0.9% in the previous session. A gauge of the region's equities .MILA00000PUS added 0.1%.

Brazilian President Luiz Inacio Lula da Silva said his country has been trying to negotiate tariffs with the U.S., but vowed to take action if no agreement is reached. Brazil's real BRL= rose 0.4%. The International Monetary Fund (IMF) revised up its economic growth forecast to 2.3% this year, from a forecast of 2% in April.

Sao Paulo's main stock index .BVSP was flat, as fresh data revealed Brazil's industrial production growth fell short of expectations in April from March.

Investors were eagerly looking ahead to the country's latest fiscal package, due later on Tuesday. It is aimed at addressing fiscal concerns after a tax hike last month triggered a backlash.

Brazil, the biggest Latin American economy, has been attempting to hit its goal of eliminating its deficit this year before interest payments.

"There has been a lot of focus on the fiscal side ... But, there is still a lot of work to be done and that will have to be done by the next administration after next year's elections," Harrison said.

Mexico's peso MXN= slipped 0.1%, with its equity markets .MXX falling 0.2%.

The country hosted its first-ever judicial elections on Sunday as part of a reform of the judiciary, though low turnout fueled concerns about undermining an already controversial reform. Chile's peso CLP= fell 0.2% and the country's main stock index .SPIPSA was flat.

Colombia's peso COP= rose 0.5% in conjunction with a rise in crude prices due to growing geopolitical tensions. Crude petroleum is the country's largest export. Argentina's main equities index .MERV dropped 0.4%, set for its sixth consecutive daily decline.

Ukraine's international bonds fell as heightened tensions between Moscow and Kyiv overshadowed a second round of negotiations between the two warring countries.

Polish assets extended their declines amid a deepening political crisis after Prime Minister Donald Tusk on Monday announced calls for a confidence vote following conservative opposition leader Karol Nawrocki's presidential victory.

Key Latin American stock indexes and currencies: